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The Economy of Afghanistan
Afghanistan is an extremely poor, landlocked country, highly dependent on foreign aid, farming and livestock raising (sheep and goats), and trade with neighboring countries. Economic considerations have played second fiddle to political and military upheavals during more than two decades of war, including the nearly 10-year Soviet military occupation (which ended 15 February 1989). During that conflict, one-third of the population fled the country, with Pakistan and Iran sheltering a combined peak of 4 to 6 million refugees. Gross domestic product has fallen substantially over the past 20 years because of the loss of labor and capital and the disruption of trade and transport; severe drought added to the nation's difficulties in 1998-2002.
The majority of the population continues to suffer from insufficient food, clothing, housing, and medical care, and a dearth of jobs, problems exacerbated by political uncertainties and the general level of lawlessness. International efforts to rebuild Afghanistan were addressed at the Tokyo Donors Conference for Afghan Reconstruction in January 2002, when $4.5 billion was pledged, $1.7 billion for 2002. Of that approximately $900 million was directed to humanitarian aid - food, clothing, and shelter - and another $90 million for the Afghan Transitional Authority. Further World Bank and other aid came in 2003. Priority areas for reconstruction include upgrading education, health, and sanitation facilities; providing income generating opportunities; enhancing administrative and security arrangements, especially in regional areas; developing the agricultural sector; rebuilding transportation, energy, and telecommunication infrastructure; and reabsorbing 2 million returning refugees. The replacement of the opium trade - which may account for one-third of GDP - and the search for oil and gas resources in the northern region are two major long-term issues.
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